ALS Capital Ventures LLC v. Lincoln Life & Annuity Co. of N.Y.

MEMORANDUM DECISION AND ORDER   On August 13, 2018, ALS Capital Ventures, LLC brought this action against Lincoln Life & Annuity Company of New York and J Rosenberg Distribution Trust, by and through its trustee, Moshe Glatzer, alleging unlawful conduct in connection with a life insurance policy. (ECF No. 1.) On December 3, 2018, the Distribution Trust answered the complaint and asserted three counterclaims against ALS Capital Ventures for breach of contract, specific performance, and a declaratory judgment. (ECF No. 12.) ALS Capital Ventures subsequently moved to dismiss the Distribution Trust’s counterclaims.¹ (ECF No. 25.) The parties are otherwise engaged in discovery on the original claims. For the following reasons, ALS Capital Ventures’ motion to dismiss is granted. BACKGROUND Lincoln Life, a New York-based insurance company, issued a life insurance policy for Jeno Rosenberg in June of 2008. (ECF No. 36 at 12 1.) The policy, worth $8.5 million (ECF No. 31 43; ECF No. 36 at 15

29, 30), is a “flexible” policy, and the payment required to maintain it varies from month to month. (ECF No. 31 48; ECF No. 36 at 4 48.) The Distribution Trust’s counterclaims are based largely on its theory that it is the rightful owner and 100 percent beneficiary of the life insurance policy underlying ALS Capital Ventures’ complaint. The policy has undergone multiple ownership transfers since its issuance. The original policy owner, the Jackson Avenue Trust,² sold the policy to ALS Capital Ventures’ predecessor company³ by executing a purchase agreement. (ECF No. 33-1 at 1-9; ECF No. 36 at 13 3.) The parties also entered into a side letter agreement dated January 12, 2011 (ECF No. 36 at 13 8; see also ECF No. 25-2 at 70), which provided that the seller — the Jackson Avenue Trust — would retain the right to name beneficiaries of the policy “in lieu of accepting an amount equal to the purchase price.” (ECF No. 25-2 at 70.) The Jackson Avenue Trust then designated the Distribution Trust as a beneficiary, and stated that the Distribution Trust would receive $1.3 million in insurance policy proceeds directly from the insurer. (Id.) The side letter agreement also referred to a “[p]urchase [a]greement dated January 4th, 2011,”⁴ and stated that the buyer “accept[ed] full responsibility for any and all future obligations under the [p]olicy (including, the payment in full when due of any and all premium payments required to be made in connection with the policy.).” (Id. at 71.) If the buyer failed to make a premium payment and the insurer sent the buyer a notice of grace period, the buyer was required to forward the notice to the seller 25 days before the policy lapsed. (Id.) At that time, the seller could make the required payment to the insurer and regain full ownership of the policy. (Id.) ALS Capital Ventures acquired the policy in 2013. (ECF No. 36 at 13 6.) In a January 8, 2013 letter addressed to the trustee of the Distribution Trust, ALS Capital Ventures “accept[ed] and acknowledg[ed] all terms and conditions of the” side letter agreement to which its predecessor company agreed. (ECF No. 36 at 13 8; ECF No. 29-3 at 1.) In January and February of 2017, Lincoln Life sent ALS Capital Ventures two notices of grace period, which ALS Capital Ventures never received.⁵ (ECF No. 31